Companies Accelerating Adoption of Cloud-Based HR Platforms Amid Pandemic, ISG Survey Finds

Companies have accelerated their move to cloud-based HR platforms amid the pandemic and say they are expecting adoption to grow in the coming years, a new survey from Information Services Group (ISG) (Nasdaq: III), a leading global technology research and advisory firm, finds.

The ISG survey of 260 companies worldwide found 46 percent using an HR Software-as-a-Service (SaaS) platform or hybrid solution, up from the 20 percent who said they were using a cloud-based solution two years ago. Looking to the future, the survey found 57 percent of organizations expect to be using a subscription-based SaaS or hybrid solution by 2023.

The findings were published today as part of the 2021 ISG Survey on Industry Trends in HR Technology and Service Delivery report. Study co-author Stacey Cadigan, partner, ISG HR Technology, will discuss the findings today at 12 p.m., U.S. Eastern Time, during a webinar, “Moving Forward: 2021 Industry Trends in HR Technology,” hosted by the Society for Human Resources Management (SHRM).

“In 2020, the COVID-19 pandemic changed work in unimaginable ways and put increased focus on the potential of HR SaaS technologies to better engage employees, support a virtual workforce, improve productivity and enable a more agile HR model,” said Cadigan. “Our survey reveals growing interest in HR SaaS, as more and more companies are realizing measurable business value from a platform-based approach.”

The survey found 64 percent of companies say they are achieving measurable business value from their investment in HR SaaS platforms, up 23 percentage points, or about 50 percent, since 2019, the last time ISG conducted the survey. Business value is determined by a range of metrics, including productivity, cost savings and employee retention.

Among the measures of business value, the survey found organizations achieving significant HR cost savings from their move to HR SaaS solutions, with 70 percent reporting savings of 10 percent or more, and 37 percent achieving savings of 20 percent or more.

“HR has been on the frontlines throughout the pandemic, one of the most stressful events in recent history,” said Deb Card, partner, ISG HR Technology, and co-author of the report. “HR technologies delivered value by enabling real-time, data-driven decision-making; fostering connections and collaboration among employees in a remote work environment; monitoring performance, productivity and engagement, and enabling virtual recruiting, onboarding and offboarding.”